EU Law

legal result can differ according to both legislations. The E-SIGN Act defines the transferable record as an electronic record that is a “note” under Article 3 of the Uniform Commercial Code (UCC). A “note” under the UCC means a “written undertaking to pay money signed by the person undertaking to pay.”²⁰⁶ Accordingly, a document of title is not an undertaking to pay money, so it is not a note in the E-SIGN Act. Consequently, negotiable B/Ls and other title documents are overlooked in the E-SIGN Act.

By contrast, the UETA sees a transferable record as an electronic record that is a note under Article 3 of the UCC or a document under Article 7 of the UCC.²⁰⁷ The subject of Article 7 are documents of title, and by definition, B/L, dock warrant, and warehouse receipt are in this category according to Article 1 of the UCC.²⁰⁸ Therefore, the UETA governs transferable B/Ls and requires the issuer of the electronic record to expressly agree that this record is transferable.

Similar to the Rotterdam Rules, the UETA substitutes “possession” in the paper analog with “control” over the transferable electronic record. A person in control of the transferable record shall have the same rights and defenses as a holder of a correspondent paper document.

The “control” may be evidenced by a system that meets the requirement set forth in the Section 16(c). The specific provisions listed in Section 16(c) are derived from Section 105 of Revised Article 9 of the UCC and generally requires the transferable electronic record to be unique, identifiable, and unalterable. Any revision and change to the record must only be made under the consent of the person asserting control.

continent of Europe, the EU noticed its potential and realized the necessity to embrace this technological innovation in a European-coherent manner. Before the EU took legislative actions, two EU member countries, Germany and Italy, have all published their own laws governing electronic signature.²⁰⁹ Both countries have adopted a technology-specific method, i.e., the PKI method,²¹⁰ to ensure the security of the electronic data. Given that this method is not shared by other EU countries, the EU detected that individual action can endanger the internal market for Internet commerce services. Therefore, the Internal Market Directorate of the Commission must carry the responsibility to provide a uniform solution for all the EU member states.

Given that the EU can only operate within the authority conferred by treaties, including the Treaty on European Union,²¹¹ it cannot intertwine if an issue can be dealt with effectively by member states at the central, regional, or local level. With regard to the issue of electronic data, the EU must respect the independence of the member states and ensure the freedom of the internal market of the EU. Therefore, the EU has employed a double-lateral legislative structure to ensure the functionality of electronic documents across the EU without interfering in the domestic affair of member States. The double-lateral structure divides the electronic documents into two categories, namely, qualified and non-qualified documents. Qualified electronic documents must fulfill several strict requirements in relation to security and reliability. The EU member states are obliged to recognize the data when these requirements are met. The legal effect of non-qualified documents can be determined by the regulations in respective member states. Establishing another set of uniform standards toward electronic documents and making the standards EU-wide applicable with the help of mutual recognition treaties can possibly be done by the EU member states. Such an effort has not been witnessed

209 Germany has enacted its electronic signature law as part of its Information- und Kommunikationsdienste-Getze in 1997.

Italy has enacted “Regulations establishing criteria and means for implementing Section 15(2)of Law No. 59 of 15 March 1997 concerning the creation, storage and transmission of documents by means of computer-based or telematic systems” on November 10, 1997.

210 PKI refers to the “public key infrastructure” within which trusted third parties issue certificates binding an identity to a public key. For more information, see “What is a PKI?” at the Web site of Public Works and Government Services of Canada, www.solutions.gc.ca/pki-icp/beginners/whatisapki/whatisapki_e.asp.

211 For example, the principle of proportionality, which is laid down in Article 5 of the Treaty on European Union, requires that the action of the EU must be limited to what is necessary to achieve the objectives of the treaty. See Official Journal C 326 , 26/10/2012 P. 0001–0390,

in the field of electronic B/Ls. Some countries, including Germany, have not even determined the details about electronic B/Ls.²¹² Dealing with the EU as an entirety, this section emphasizes on the laws applicable across the whole EU.

The EU has not yet passed a law that specifically governs the electronic B/Ls until now, but the regulatory framework built by the EU in relation to electronic documents can provide useful insights into the possibilities of applying electronic B/Ls in the EU. Therefore, this section focuses on introduction of law principles and rules on the EU level.

a. Law Principles aa. Principles

The EU has published a series of documents regarding electronic commerce since the Commission of the European Communities first proposed “A European Initiative in Electronic Commerce” on April 16, 1997.

In this document, the Commission has not only set up a framework for the future development of electronic commerce in Europe but has also established four guiding principles for legislation in the domain of electronic commerce. The four principles are as follows:

1. Internal market principle

The building of a single internal market, which allows the free movement of goods, capital, services, and labor, has always been at the heart of the EU policies. The establishment of an integrated electronic commerce market is certainly a part of this objective. “A European Initiative in Electronic Commerce,”²¹³ which was proposed by the Commission of the European Communities on April 16^t, 1997, stated that the Commission regards the

“development of divergent legislative approach in member states” as one of the greatest risks of fragmenting the internal market, and a coherent regulatory framework for electronic commerce at European level must therefore be ensured.²¹⁴ In the later published “Directive on

212 See section 516(3) of the German Commercial Code. “The Federal Ministry of Justice is hereby empowered to determine by regulation, issued in agreement with the Federal Ministry of the Interior and not requiring the consent of the Federal Council (Bundesrat), the details of issuing, presenting, returning and transmitting an electronic bill of lading, as well as the particulars of the process of posting retroactive entries to an electronic bill of lading.”

213 Available at http://aei.pitt.edu/5461/1/5461.pdf.

214 Available at https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=LEGISSUM:l32101&from=EN, on pp.37–38.

Electronic Commerce,” the EU further explained that the regulatory framework can be achieved through “eliminating legal obstacles by coordinating certain national laws and by clarifying certain legal concepts at Community level to the extent necessary for the proper functioning of the internal market.”²¹⁵

Based on this principle, the legislations adopted by the EU should be drafted in a coherent manner and should be effective across all EU member countries. Data or service that comply with the EU laws should be able to circulate freely in the internal market.

2. Minimal regulation principle

This principle is based on the fact that the free movement of electronic commerce services can be effectively achievedby mutual recognition of national rules and of appropriate self-regulatory codes. The EU should only take actions when mutual recognition and self-regulation are insufficient. Besides, although taking legislative actions is needed, the acts should be drafted with respect to the business reality and under the premise that fewest burden will be imposed on the market participants.

3. General interest principle

General interest stands for privacy, data security, and consumer rights, among others.

The EU believes that safeguarding the recognized general interest will help boost confidence and trust to win over business and consumer to electronic commerce. More importantly, in virtue of this principle, the EU is legitimated to provide a uniform safety standard at the EU level without violating the minimal principle. This provision can effectively prevent individual member states from adopting their own rules to safeguard the legitimate concerns of their citizens.

4. Technology neutrality principle

The principle of technology neutrality has been one of the major principles of the EU from the outset.²¹⁶ However, the interpretation of technology neutral in the EU is not exactly the

215 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce'), OJ L 178, 17.7.2000, on pp. 1–2.

216 See European Commission, Towards a new framework for Electronic Communications infrastructure and associated services, COM (1999) 539; Korber, Der Grundsatz der Technologieneutralitat im Telekommunikationsrecht, Expert Opinion, Jena 2007, on p.7 f.

same as in the UNCITRAL.²¹⁷ The Recital 18 of the Framework Directive 2002/21 defined the principle of technological neutrality as

The requirement for Member States to ensure that national regulatory authorities take the utmost account of the desirability of making regulation technologically neutral, that is to say that it neither imposes nor discriminates in favour of the use of a particular type of technology, does not preclude the taking of proportionate steps to promote certain specific services where this is justified, for example digital television as a means for increasing spectrum efficiency.²¹⁸

A close look into this definition reveals that the EU also approves a non-discriminative and market-leading attitude toward different technologies, but this attitude ends when it is justified to promote certain services. Although the “justification” causes for the promotion of certain specific services remain questionable, the definition of this principle clearly grants the imposition of influence from legislative sector on market outcomes.²¹⁹

bb. Summary

The law principles at the EU level are apparently distinct from the principles set by the UNCITRAL and the US. First, the EU prioritizes to build a coherent regulatory framework inside the EU internal market. The EU is a super-national organization empowered by treaties, so it cannot regulate the electronic law in its member countries directly like a sovereign state, which means that the EU cannot adopt a liberal path as the US; otherwise, it will result in a number of different legislations in its member countries. Thus, although the EU also proposed a minimal principle with the idea of letting an industry to be in a suitable position to choose the most suitable technology for themselves, it does not provide the industry with the same degree of freedom as the UNCITRAL or the US. Second, the EU has interpreted the principle of general interest in a broad sense and therefore compressed the space for a functional equivalence approach. That is, merely mirroring the functions of a paper document is

217 See the UNCITRAL interpretation in Part B, Section 1(3) of Chapter 2.

218 Directive 2002/21 on a common regulatory framework for electronic communications networks and services (Framework Directive) [2002] OJ L108/33.

219 For a detailed analysis on the principle of technological neutrality, see Kamecke, Ulrich, and Torsten Korber.

Technological neutrality in the EC regulatory framework for electronic communications: A good principle widely misunderstood, European Competition Law Review 29.5 (2008), on p. 330.

unacceptable in the EU, and the electronic data circulated in the EU market must also fulfill security requirements. Besides, adhering to the general interest also provides the EU with rightful authority to pass additional detailed regulations in promoting harmonization. Third, the meaning of technological neutrality is narrowed down in the EU context. Unlike the absolute neutrality hold by the UNCITRAL and the US, the EU can influence the adoption of technology by promoting certain services. This different thinking mode can certainly make a difference regarding the application of electronic documents. The following section presents results of the EU law principles regarding the formation and transferability of electronic B/Ls.

b. Form

The legal requirements for the form of electronic documents on the EU levels are mostly set down in the Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market, also known as the eIDAS Regulation.²²⁰ The concept “trust service” is crucial to understand the impact of this regulation on electronic data.

As the term suggests, it is a service used to boost the trust of the participants in electronic transactions. The trust services are associated with the entire lifecycle of electronic transactions, such as electronic documents, electronic time stamp, electronic seal, and electronic signatures, among others. These data produced by trust service can gain a higher degree of trust than those is not and can thereby circulate freely in the internal market. If the data are generated by a

“qualified trust service,” then the security degree of the data will increase.

This regulation has been published on August 28, 2014, and a transition period has been established before the regulation has to be effectively applied; thus, the regulation has entered into effect for only a short time.²²¹ This regulation has not been applied in the Court of Justice of the European Union;²²² therefore, no case study is carried out in this section.

aa. Writing

Electronic data and information in the EU do not have to be written down in paper to

220 Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC, OJ L 257, 28.8.2014, pp. 73–114, hereinafter the eIDAS Regulation.

221 The date of effective application of the provisions regarding trust services is July 1, 2016.

222 Last checked on January 11, 2019.

obtain legal effect, but the acknowledgement to their legal effect is not absolute. Article 46 of the eIDAS Regulation provided a similar rule as in the UNCITRAL Model Law on Electronic Commerce that forbids the authority to deny the electronic document’s legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in electronic form.²²³ However, instead of reinforcing the legal effect of electronic documents by introducing a functional equivalence method as the UNCITRAL suggested, the eIDAS Regulation limits the use of electronic documents by creating a new concept named “electronic registered delivery service.”

The “electronic registered delivery service” aims to help data be electronically transmitted between third parties and provide evidence regarding the handling of the transmitted data.²²⁴ In line with this concept, the legal effect of electronic data depends on the “electronic registered delivery service” if the data are to be transmitted. Interestingly, the eIDAS Regulation used almost the same text when describing the legal effect of the data processed by this service as by normal electronic document except for one difference: “Data sent and received using an electronic registered delivery service shall not be denied legal effect and admissibility … on the ground(s) that… it does not meet the requirements of the qualified electronic registered delivery service.”²²⁵ This provision clearly indicates that the data sent and received via a qualified electronic registered delivery service has a high degree of validity under the EU law, but what is a “qualified electronic registered delivery service”?

The eIDAS defines “qualified electronic registered delivery services” as services that are

“sufficiently secured” and therefore should be recognized in every member states. The qualified registered delivery service must fulfill six requirements: (a) they are provided by one or more qualified trust service provider(s); (b) they ensure a high level of confidence on the identification of the sender; (c) they ensure the identification of the addressee before the delivery of the data; (d) the sending and receiving of data is secured by an advanced electronic

223 See Article 5 of the UNCITRAL Model Law on Electronic Commerce.

224 Ibid., Article 3 (36): “electronic registered delivery service’ means a service that makes it possible to transmit data between third parties by electronic means and provides evidence relating to the handling of the transmitted data, including proof of sending and receiving the data, and that protects transmitted data against the risk of loss, theft, damage or any unauthorised alterations.”

225 Ibid., see, Article 43(1).

signature or an advanced electronic seal of a qualified trust service provider to preclude the possibility of the data being changed undetectably; (e) any change of the data needed for the purpose of sending or receiving the data is clearly indicated to the sender and addressee of the data; and (f) the date and time of sending, receiving, and any change of data are indicated by a qualified electronic time stamp.²²⁶ If data are sent and received using such a qualified electronic registered delivery service, the data will be granted a “trust mark.”²²⁷ The integrity of that data, time sent and recipient, and the identities of the sender and receiver can all be presumed as true.²²⁸

Aside from all the particular requirements for the qualified electronic registered delivery service, the eIDAS also provided a supervisory system to ensure the accountability and security of its operations. The qualified electronic registered delivery service will be ex-ante and ex-post audited by supervisory bodies that are designated by respective member states. Non-qualified service does not have to be examined unless the supervisory body is called up.²²⁹ By providing such a comprehensive and functioning system for the qualified electronic registered delivery system, the eIDAS provided such service with an extremely high level of legal certainty.

Based on these regulations, the EU showed a double-lateral legislative structure.

Particularly, by dividing the same service into qualified and non-qualified service, the EU leaves a great deal of space for member states to develop their own standards while a common standard across the EU is established and the reliability of the services conform to this standard shall be recognized by all member states.²³⁰

In summary, the EU should be extremely careful in generating and transmitting data information. Determining whether the information is legally valid or admissible at a EU member state court if it is generated by a normal software or transmitted by a non-qualified service provider is difficult because the eIDAS Regulation has only granted a minimal

226 Ibid., see Article 44(1).

227 Commission Implementing Regulation (EU) 2015/806 of 22 May 2015 laying down specifications relating to the form of the EU trust mark for qualified trust services, OJ L 128, 23.5.2015, pp. 13–15

228 Ibid., see Article 43(2).

229 Ibid., see Recital (36).

230 Ibid., see Article 4(2), it states: “Products and trust services that comply with this Regulation shall be permitted to circulate freely in the internal market.”

recognition to such information. Moreover, the legal effect of this document depends on the particular domestic law. By contrast, using a qualified electronic registered delivery system in the EU is highly secured and is admissible all across the EU. The eIDAS has built a comprehensive and functioning system around qualified electronic registered delivery service with liability regime which is “entirely based on the model of traditional registered mail services provided by postal service provider.”²³¹ Data processed by such a service provider are presumed valid in all EU member states, and the burden of proof should lie with the service provider when damage occurs during this process.

bb. Originality

The EU law recognizes that originality in the electronic environment stands mostly for the integrity of the data. The issue “originality” or “integrity” is not specifically addressed under the eIDAS Regulation. Instead, the integrity and origin of data is dependent on an

“electronic seal” or an “electronic signature.”²³² Recital (59) of the eIDAS Regulation states that “Electronic seals should serve as evidence that an electronic document was issued by a legal person, ensuring certainty of the document’s origin and integrity.” Furthermore, Recital (58) stipulates that a “qualified electronic signature” is equally acceptable when a transaction requires a “qualified electronic seal.”²³³

Given that the originality of a document is entirely dependent on the effect of electronic signature and electronic seal, the document signed or sealed with a qualified electronic signature or seal will be regarded as original. However, if the document is not associated with a qualified electronic signature or a qualified electronic seal, such document does not suffice the requirement for originality.

cc. Signature

The rules governing electronic signatures in the eIDAS Regulation evolved mostly on the ground of the European Directive 1999/93/EC.²³⁴ Electronic signatures are categorized into

231 Dumortier, Jos. “Regulation (EU) No 910/2014 on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market (eIDAS Regulation).” (2016), on p. 23.

232 Details about “qualified electronic signature” are offered in the following subsection.

233 Ibid., see Recital (58) and (59).

234 Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures OJ L 13, 19.1.2000, pp. 12–20.

Im Dokument Digitalization of Maritime Transport Documents : a study of the interplay of public rules and private norms amid social changes (Seite 78-88)